Proposed Disposal of the Football Pools Business for cash consideration of £83.0 million

02 Mar Proposed Disposal of the Football Pools Business for cash consideration of £83.0 million

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FOR IMMEDIATE RELEASE

2 March 2017

Sportech PLC
(“Sportech” or the “Company”)

Proposed Disposal of the Football Pools Business for cash consideration of £83.0 million

Summary

Sportech and OpCapita LLP (“OpCapita”) today announce that a conditional agreement has been entered into under which FP Acquisitions Limited, a newly incorporated private limited company controlled by funds advised by OpCapita will acquire the Football Pools Business (the “Disposal”) for a total cash consideration of £83.0 million on a debt free, cash free basis.
Sportech’s Board believes that the Disposal is in the best interests of Shareholders for the following key reasons:
• it represents an attractive opportunity to realise the value of the Football Pools Business following the successful implementation of its modernisation programme and as it continues to transition its business model in an increasingly competitive UK gaming market;
• it will create a focused gaming business primarily based in the US and comprising the Racing and Digital (a leading global supplier of betting technology to the horseracing and sports industry) and Venues (the exclusive betting operator in Connecticut) divisions, operating in a market with attractive long term growth prospects underpinned by potential future regulatory change in the gaming industry;
• it will provide the Retained Group with additional resources to invest in product and technology developments, the potential rollout of US venues in Connecticut and California and pursue other potential growth opportunities where the Board considers attractive returns on investment can be generated;
• the Board considers that the Football Pools Business and the Retained Group, whose constituent parts do not have material synergies, would each benefit from the increased management focus which would be achieved through a separation; and
• the net cash proceeds of the Disposal may enable the Sportech Group to provide a further return of capital to Shareholders, with the quantum and timing of such return to be determined by the Board following Completion of the Disposal. This would be in addition to the return of capital announced by the Company on 2 March 2017 (subject to, amongst other things, the availability of sufficient distributable reserves and the general ongoing capital requirements of the Retained Group).

The Disposal is conditional upon the Purchaser having obtained the necessary licences from the Gambling Commission and the passing of the Resolution by Sportech Shareholders at the General Meeting. A circular containing further details of the Disposal and the resolution to approve the Disposal (the “Resolution”), the Board’s recommendation and irrevocable undertakings to vote in favour of the Resolution, and the Notice convening a General Meeting of the Company will be sent to Sportech Shareholders following the completion of the Tender Offer announced on 2 March 2017.

OpCapita has long studied the gaming and leisure sectors for investment opportunities and in The Football Pools, formed through the combination of predecessor brands Littlewoods, Vernons and Zetters, believes it has found an ideal acquisition. The business has a loyal customer base, providing a solid foundation on which to build, through new distribution channels, additional new games and fresh marketing.
The Football Pools is still planning to move into new premises in Liverpool city centre, a move that OpCapita fully supports as part of its commitment to growing the business.
Commenting on the Disposal, Ian Penrose, Chief Executive of Sportech, said:

“The sale of The Football Pools Business represents an important strategic development for Sportech, having established a strong platform for growth, following completion of an extensive and successful modernisation programme. We have delivered our objective of stabilising earnings, and are delighted to have concluded this deal for Sportech’s shareholders, The Football Pools Business and its employees.”

“On behalf of the Board, I would like to thank the management and employees of The Football Pools for their significant contribution to the Company and to wish them well for the future”.

John Von Spreckelsen, Chairman of OpCapita, said:

“We are delighted to be acquiring The Football Pools, which occupies a unique place in British culture. Sportech has successfully modernised the business and we look forward to realising its significant growth potential. As part of that growth strategy, we plan to ensure existing loyal customers continue to enjoy the game and bring The Football Pools, already loved by so many, to an even wider audience”.

“We look forward to partnering with Conleth Byrne and his team to help develop the company further and supporting the community with its commitment to charitable causes.”

About Sportech

Sportech PLC is a sports gaming and entertainment Company and one of the world’s leading pool and tote betting organisations. We focus on highly regulated markets worldwide, with our largest activities in the US. Globally we processed approximately $11.6 billion of bets during 2016, with a presence in 30 countries, including customers in most US states that permit such betting. The Company operates through 3 divisions: Sportech Racing and Digital, Sportech Venues, and The Football Pools, providing betting technology and operating systems and retail venues for betting on football (soccer), horseracing and greyhound racing. Headquartered in London, England, the Company also has operational offices in Connecticut, Atlanta, Toronto, California, New Jersey, Liverpool, Bristol, Netherlands, Germany, and Ireland. For more information about Sportech PLC, please visit www.sportechplc.com.

About OpCapita

Founded in 2006, OpCapita is a European private equity advisory firm specialising in the retail, consumer and leisure industries. OpCapita advised funds actively invest in companies where there is an opportunity to deliver improvements in profitability and create long-term, sustainable value.

OpCapita’s team of in-house operating partners has decades of experience in consumer-facing businesses and a widespread network of contacts and specialists. The team adopts a hands-on approach to the companies in which it invests, drawing on exceptional management talent to deliver on its investments.

Over the past ten years, OpCapita has invested over €450 million in businesses in the UK, France, Germany and Spain. OpCapita closed its first dedicated fund, OpCapita Consumer Opportunities Fund LP, at the end of 2014. Its second dedicated, fund, OpCapita Consumer Opportunities Fund II LP, closed on €350m in 2016 and was significantly oversubscribed.

This summary should be read in conjunction with the full text of this announcement.

This announcement contains inside information.

For further information, please contact:

Sportech PLC Tel: +44 (0)20 7268 2400
Ian Penrose, Chief Executive
Mickey Kalifa, Chief Financial Officer

Investec Bank PLC Tel: +44 (0)20 7597 4000
(Financial Adviser and Joint Broker to Sportech)
Chris Treneman, James Rudd
Patrick Robb, Henry Reast

Peel Hunt LLP Tel: +44 (0)20 7418 8900
(Joint Broker to Sportech)
Dan Webster, Adrian Trimmings

Brunswick Group LLP
(Financial PR adviser to Sportech) Tel: +44 (0)20 7404 5959
sportech@brunswickgroup.com

Mike Smith, Stuart Donnelly

Dean Street Advisers
(Financial adviser to OpCapita)
Kevin Berry Tel: +44 (0) 203 818 8520

Greenbrook Communications
(Financial PR adviser to OpCapita)
Andrew Honnor, Charlotte Balbirnie, Matthew Goodman
Tel: +44 (0) 207 952 2000

For full details, please click on the following link:
http://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/SPO/13144654.html